Australian Regulators Issue Accountability Rules

Earlier this month, the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) unveiled final rules and guidance to facilitate the implementation of the Financial Accountability Regime (FAR).

Replacing the Banking Executive Accountability Regime (BEAR), FAR establishes a responsibility and accountability framework for regulated entities in banking, insurance, and superannuation, along with their directors and senior executives. The regime aims to enhance risk and governance cultures within these institutions by requiring that executives take ownership of them.

The released package includes:

• Regulator rules outlining information for inclusion in the FAR register of accountable persons;
• Transitional rules detailing data requirements for authorized deposit-taking institutions (ADIs) transitioning from BEAR to FAR;
• Descriptions of ADI key functions to aid in function allocation; and
• Reporting form instructions to facilitate data submission to APRA and ASIC.

These materials stem from a joint public consultation. In an accompanying letter, the regulators address issues raised during consultation, such as data collection for the FAR register and the definition and application of key functions. This release supplements the FAR information package issued in October 2023.

FAR implementation began on March 15, 2024, for the banking sector and will begin on March 15, 2025, for superannuation and insurance, with further consultations planned for the latter sectors.